Top Personal Finance Articles #15

I had two posts this week which left me a little bemused as as to how different Australia is from the US. The first post was in regards to buying a rental property as an investment and some of the comments I got really shocked me. I had never before heard of someone buying a rental property that could make money straight away. The concept is almost laughable in Australia with our high property prices and high interest rates.

When commenters were saying I should find one that has an immediate positive return I thought to myself – these guys are crazy – where on earth do you find an investment like that? The answer apparently is the USA – who knew. My follow up question (which is still yet to be answered) is why would people rent a house from someone when the mortgage repayments is less per week than the rental amount?

My next post caused almost as much confusion for me when I discovered that “Penny Dreadfuls” are not available to trade in the US on an exchange like the S&P or DOW like they are in Australia on the ASX. I was gobsmacked. Who knew the two countries could be so different?

In other news…

It has started to get cold lately and getting up at 5:30am to go to work just doesn’t agree with me when the temperature gets lower. It is only made that much more difficult because I can see both my wife and son still nice and warm tucked into bed, enjoying the warmth of the blankets while Ricky and I make the journey into the backyard so he can relieve himself before he gets to go back to sleep.

I shouldn’t complain, poor Alexis (my wife) has been getting to bed really really late the last couple of nights, as Nick just isn’t interested in going to sleep at the same time as his parents.

Speaking of Nick, last night I was fortunate enough to get to change him during one of his explosive poo episodes. You wouldn’t believe the amount of excrement that the little fellow is able to produce in one go. To make things worse, I don’t think I will ever look at chocolate soft serve ice cream the same way again…

I took a mini break from all my online income activities this week and had a night of playing video games with my brother who lives in the UK. My brother and I used to do this almost nightly for a while, but it’s certainly a luxury these days considering the time zone difference and the family commitments that I now have with my little man.

Finally I made bread for the first time in my life on Monday. It took a while, but it was very tasty and I am confident I will make it again, although next time I might look into using a bread tin to give it a better shape.

Search Terms

expensive piggy banks – why would you want an expensive one?

should i trust my wife with our money – You trusted her enough to get married…

not enjoying being a dad – You are obviously doing something wrong buddy.

men are the best thing to spend money on – Feel free to spend on me 🙂

i want to take 3 pirated cds to australia – Ummm people still use cds?

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Good news: The poosplosion is just a phase. I goes away in a couple of months. My newest was born May 1, and he’s a precocious pooper–he started poosploding today. 😛

“My follow up question (which is still yet to be answered) is why would people rent a house from someone when the mortgage repayments is less per week than the rental amount?” Why would someone become a landlord unless the rental makes a profit? 🙂 The mortgage is ALWAYS less than the rental. The question is whether you can cover the maintenance, etc., and still make a profit.

People rent because 1) they can’t come up with a downpayment, 2) their credit is too bad for a mortgage at a decent rate, 3) they don’t like dealing with repairs and remodeling, and/or 4) they expect to be in an area temporarily.Jenny @ Frugal Guru Guide recently posted..Self-Employed Or Business Owner? No FSA For You!

Hey Glen, thanks for the mention. I suppose there could be a few answers to your follow up question. Firstly the person renting might not be able to qualify for a mortgage – for one reason or another – but a landlord might still be happy to take them on (I know that might seem a little odd but it happens a lot).
Another reason could be that a person doesn’t want to have the burden of maintaining a property so would rather let someone else have that hassle and just rent a property instead.
Maybe someone is unsure that they will stay in the area in which they live due to family commitments or job prospects and as a result, they don’t want to tie themselves down with buying a property which they might find they’re unable to sell if the housing market in Australia does have a US style crash.
Or it could also work the other way around where someone might be moving into a new area/country which they aren’t familiar with, so rather than buy a home straight away, they may instead decide to get to know the area for a while first.
I know on the surface some of these reasons might not make much sense because you would think that if somebody could not qualify for a mortgage, they would also not qualify for a rental especially for more money but often that’s not the case. Not here in the UK anyway.Money Bulldog recently posted..Investing in Bitcoin: A New Frontier?

I think people rent for a variety of reasons, because they plan on moving soon, having a family and needing more house, getting a new job in a new town… If the mortgage repayment is lower than rent, it doesn’t mean that you can get that level of repayment with no down payment, so if you put 20% down (some people can’t), or 40% down you will get bigger cash flow. Also it is usually people with good credit getting a good rate, with a higher rate for bad debtors, you would maybe be better off renting.
My UK property had instant cash flow but I put 25% down, so I consider the return on the 25% to see if it is worth it.
Thanks for the mention!Pauline recently posted..Friday recap, a new site and politeness

I find we (Aussie bloggers) have some niche experiences and topics, so I like to share them as a bit more of a ‘here’s how we do it here’ rather than a tutorial or similar, cause I know how different health insurance and student loans are elsewhere. But I think readers can appreciate learning about how other places do things, even if you wisdom can’t be replicated. I certainly enjoyed both posts this week (and the round up of the chocolate styled explosion!)SarahN recently posted..Why I read your blog

Fascinating to see some of the differences between Australia and the United States . Maybe a good future post is the outline some of the differences you have found.Free Money Minute recently posted..The 51st Employee is Fired!

Taking a night off to play video games sounds freaking amazing. Reminds me of high school days where life was simple and things like that could be a nightly event 😉

If you really can’t make money straight-up from the rental, might make more money to invest in some online businesses instead, or wait until the Australia housing market crashes (kidding!). The rates here in the US are bound to increase, but for now we have this strange mix of relatively low housing prices and rock-bottom interest rates. We are delaying a painful correction, in my opinion, but we’ll see what happens.DC @ Young Adult Money recently posted..Friday Giveaway Roundup – 227 Giveaways

LOL, sounds like you had all kinds of fun stuff going on this week, Glen. :-). Rick always hated when the kids had explosive poos, as they seemed to often happen on the rare occasions when I would head out without the kiddos. It is amazing what those little ones can produce though. Congrats on making bread too! I’m still learning not to be intimidated by yeast breads. 🙂 Have a great weekend, Glen!Laurie @thefrugalfarmer recently posted..Some Link Love and a Plea, to You From Me

“You wouldn’t believe the amount of excrement that the little fellow is able to produce in one go.” Lol! I can SOOO relate to that with our three little ones. I told my wife that I as going to trademark the word Pooplosion as they always seem to do it at the absolute worst time. It is interesting to see the differences between the States and Australia, it means I learned something new today. 🙂 Have a great weekend Glen!John S @ Frugal Rules recently posted..Frugal Friday: Does Apple owe the Government More Money?

Thanks for the mention Glen. I remember the poo explosions. We are still dealing with it now and I am sure it will pass.

When I read your post, I was a little taken aback. I didn’t think people would buy a house to rent it unless they could make money. It is not really an investment property unless you can make money. As others have stated, there are a variety of reasons why people rent. Most don’t know how much you pay for the mortgage and there are many properties you can buy in the US where you will pay much less than what you can rent it for.Grayson @ Debt RoundUp recently posted..Feeling Good Friday: Wedding Anniversary

It is fascinating learning about the differences between countries. It’s one of the reason that I love visiting all these different blogs, not only for individual insight, but also seeing the differences. Penny stocks definitely do not have a good rep in the States, yet the way you used them seemed perfectly logical and obviously works for you.

I do remember the days of pooplosion and I’m happy those days are far behind me. 🙂 Thank you for the mention, I really appreciate it!! Have a great weekend!Shannon @ The Heavy Purse recently posted..Weekly Blog Round-Up: Week of May 20, 2013

I have never had trouble buying penny stocks that are listed on the Pinksheets and OTCBB using etrade. However, they will not touch a penny stock cert or accept an account transfer with them in it with a 10 foot pole. I think is is pretty much the industry standard with all of the major brokerage houses.zimmy@moneyandpotatoes.com recently posted..The Potato Sack #1 : Blog Links and Other Poppycock

Thanks for the mention Glen. Isn’t it incredible how an hour to yourself to play video games, read a blog post, or do whatever is like GOLD now that you’ve got a little one to take care of? It really makes you appreciate your own time and how you use it.My Money Design recently posted..Blogger Fatigue and Favorite Posts

I guess it comes down to us in America just being spoiled with the real estate market in the states regarding mortgage versus rental payments. Its not uncommon to have an investor purchase a multi family home and profit $1000+ in their first month (as long as the units are rented out of course). I am a REALTOR and work with investors such as these and constantly see these results, although they do vary depending on where in America the property is.

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